Over the last 18 months Nesta has been backing five ageing ventures and 50+ other ventures to encourage us all to give more of our time, money, assets and resources to others. The challenge now is to find the best recipe to scale the best of these ideas and to get as many as possible onto a street near you.
Much has been written about different approaches to scaling social ventures and it’s well worth reading around the experiences of those who have made it like Teach First or Code Club. But it’s hard to see the wood for the trees when you’re in the midst of working out your scaling strategy sometimes. That’s understandable, but there’s so much to learn from those who have gone before.
Here’s five things I keep hearing the wise men and women with scaling experience say:
Most social ventures are brilliant and laudable causes. But the market place is crowded, so who is going to pay for them? I find myself asking ventures a lot “who is your buyer and how much are they willing to pay?” Is it a consumer who’ll pay £10 a month? Is it a local authority who’ll pay a one off £250k to establish on their patch? Too many social ventures talk about scaling with an assumption that someone will be subsidising the cost (usually a grant funder or the state). That might be true for the first round of early adopters, but at some point the market will need to pay full value. Who is your buyer and how much are they willing to pay towards what it costs to run your venture at scale?
What’s your route to getting many more users rapidly? All too often people say to me “public sector commissioners will be banging our door down once they hear about us”. Waiting for people to find out about your great idea will take time. Finding public sector managers with a budget and license to commission you will take even longer. Is there another route? What about a partnership with a high street brand that has a mass market, as Casserole Club have found by promoting their work in the Waitrose Magazine, and Oomph Wellness are finding with BUPA. What about a freemium model to get your products or service into the hands of as many consumers as possible as quickly as possible – like Tyze are pioneering, backed by The Nominet Trust? There’s no need to scale alone – do it with a friend.
It is a very legitimate way to grow, but it is not going to transform most sectors fast. When we talk about scaling we are often thinking 'how can you get rapid take up and adoption?', because having lots of users helps you to get market share, brand recognition and to really scale. Silicon Valley guru Paul Graham calls for all early stage tech innovations to keep pushing themselves to double the number of users each month for the first year. So if you have 100 users in month one don’t aim for 1,200 in month 12, aim for 204,800! Now clearly that might be rather ambitious for non-web based social ventures, but the challenge 'how can we get as many users as quickly as possible?' is hard to ignore.
The founder and the initial team may not have the skills to take something to scale. This is an incredibly brave thing to admit and to do something about. Scaling is often about the management of large teams or setting up a logistics operation to move products from donors to those in need. Logistics managers are brilliant at this. As a social entrepreneur you might not be (nor might it even be what you got into the game for). Some people bring on new board members to advise them at this stage, and many also bring in new COOs, allowing founders to step back to more strategic parts of the venture and coming up with other good ideas.
Mergers and acquisitions are common in many sectors, but not so often talked about in the social sector. Companies with memberships or distribution channels already established might buy an early stage venture to add its idea, offering or IP to its own. Done right it could be a great way to get your product or service to many more consumers fast.